JP Morgan and Chase (JPMC) is the largest banking institution in the US and the leading financial service firm globally. JPC is renowned for its exceptional service for its clients and offers services in 5 different business segments which are corporate and investment banking, consumer and community banking, asset management, commercial banking and corporate entity.
Strengths in the SWOT Analysis of JP Morgan Chase :
Leading player in the global financial services: JPMC has operations in over 60 countries and serves various customers, businesses, institutions and government clients. JPMC leads the market in investment banking, commercial banking and financial services.
Strong liquidity and capital: JPMC’s liquidity and capital position are really strong. JPMC’s deposits increased and loans decreased in the period 2008-2013 and thus company’s deposits-to-loans ratio increased to 174%.
Diversified revenue streams: JPMC has a diversified and balanced revenue stream with revenue shared by 5 different business segments which are corporate and investment banking, consumer and community banking, asset management, commercial banking and corporate entity.
Weaknesses in the SWOT Analysis of JP Morgan Chase :
Increasing expenses: JPMC’s expense management is weakening with the company’s non-interest expenses as well as its operational expenses have been increasing year on year. The company’s non-interest expenses formed about 72% of total net revenues in the year 2013.
Over dependence on certain markets: JPMC is heavily dependent on North America for a major portion of its revenues (over 65%), especially the US. Such over dependence on the as single market makes the company vulnerable to any economic or business slowdown in that market.
Fluctuating markets: JPMC is susceptible to fluctuating markets and is subject to a vulnerability of the markets and hence is unstable in such circumstances.
Opportunities in the SWOT Analysis of JP Morgan Chase :
Positive outlook for asset management: The asset management industry is growing leaps and bounds globally and is set to reach $102 trillion by 2020 with a CAGR of about 6 percent. JPMC is well equipped to be benefitted by the growth in asset management industry.
Growing Credit Card market: Credit card circulation around the world and especially in the US has been growing and with it, Chase cards are also been used more. JPMC has the potential to be benefitted by this growth as well.
Expand Geographically: JPMC should look forward to further expand its geographic reach and cover all important and demerging markets in order to increase market share.
Threats in the SWOT Analysis of JP Morgan Chase :
Regulatory challenges: Financial institutions worldwide have been challenged constantly by changing regulations, which increases compliance costs for the companies and thus affects operating margins.
A threat of Financial Crisis: Any recession or financial crisis affects financial institutions the most and hence any financial crisis will certainly impact JPMC negatively.